Page 96 -

78 CHAPTER 3 Introduction to Accounting

4. What are charts of accounts and the general ledger? How are they related?
5. What are subsidiary ledgers and reconciliation accounts? How are they
related?

6. What is an accounting document? What role does it serve?
7. Explain parallel accounting. Why do organizations maintain multiple
ledgers?

8. What is the purpose of cost objects? Provide several examples of cost
objects.
9. An organization purchases supplies for $3,000 and pays for them via a
check. Prepare the T accounts to illustrate the impact of this purchase on
the general ledger.

10. An organization purchases offi ce supplies as listed below. The vendor
invoices the organization at a later date, and the organization makes pay-
ment via a check. Prepare the T accounts to illustrate the impact of these
purchases on the general ledger.
a. Purchase offi ce supplies for $2,500 from Vendor Z.

b. Purchase offi ce supplies for $1,200 from Vendor Y.
11. An organization sells products to customers as explained below. The cus-
tomers are sent invoices at a later date, and they make payment for the
amount of the invoice. Prepare the T accounts to illustrate the impact of
these purchases on the general ledger.

a. Sell products for $3,500 to Customer A.
b. Sell products for $3,500 to Customer B.
12. Explain the relationships among asset accounts, asset classes, and gen-
eral ledger accounts.
13. Explain the three transaction types in asset accounting.
14. What are depreciation areas? Why do fi rms maintain different deprecia-
tion areas?
15. Explain the components of the asset explorer.
16. What are fi nancial statement versions? Explain how they are created.

EXERCISES

Exercises for this chapter are available on WileyPLUS.

31/01/11 1:09 PM
CH003.indd 78 31/01/11 1:09 PM
CH003.indd 78